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Tesla's internal plan shows that Tesla's Shanghai factory will cut production in January next year, according to several media reports. According to the internal plan, Tesla's Shanghai factory will produce for 17 consecutive days from January 3 to January 19 and suspend production from January 20 to January 31, longer than the Lunar New year holiday. Tesla did not disclose the specific reasons for the above production reduction news, and it is not clear whether the work of Tesla's Shanghai plant in addition to the Model 3 and Model Y assembly lines will continue during the planned shutdown period.

So far, Tesla has not made any official response to the above news.

However, it has long been rumored that Tesla's Shanghai factory is going to reduce production. Since the beginning of December, there has been a lot of news on the market about the reduction or suspension of production at Tesla's Shanghai factory. As early as December 7, there was news in the market that Tesla planned to reduce the production capacity of the Shanghai super factory by 20 per cent, saying that this was the first time that Tesla had voluntarily reduced production at the Shanghai factory. According to people familiar with the matter at that time, the move was related to the fact that the demand in the Chinese market did not meet Tesla's expectations, and it was also a decision made by Tesla after assessing his recent performance in the domestic market. Tesla has enough flexibility to increase production if demand increases. The news was later officially denied by Tesla, Tesla said: "the report that the company's Shanghai factory will reduce production is not true, Tesla Shanghai super factory production rhythm is normal." Over the next two days, an internal memo showed that Tesla's Shanghai Super Factory would suspend production of the Model Y model from December 25, 2022 to January 1, 2023, but the news was also rejected by Tesla's internal staff.

Tesla suspended production at the Shanghai plant on Saturday, suspending most of its shifts in the last week of December, according to an internal notice and two people familiar with the matter. According to the report, Tesla's Shanghai factory cancelled its morning shift and told all workers in the factory's most productive manufacturing center that they could start to rest, but also did not give a reason for suspending production. The following day, Tesla China initially responded to the news of the shutdown: "vehicle production will carry out annual production line maintenance work as planned this week, and workers will also take a rest during the production line maintenance period after a year of hard work." However, the charging piles and other workshops have not been shut down, so the factory shutdown reported by the media is not entirely accurate. "

The Shanghai plant plays a vital role in Tesla's global production. Since Tesla upgraded the production line of the Shanghai factory in July 2022, the production capacity of the factory has climbed to 1.1 million vehicles, an increase of about 127% over the same period last year, making Tesla the super factory with the highest capacity. Tesla CEO Musk has previously revealed that Tesla produced by the Shanghai factory already accounts for 1 of its total output. It should be noted that in addition to supplying the Chinese market, the cars produced by the Shanghai factory are also exported to overseas markets such as Australia, Europe, Japan and Singapore. According to the data, Tesla delivered 343000 vehicles worldwide in the third quarter of 2022, of which the Shanghai super factory delivered 188000 vehicles, accounting for 54.8% of the total delivery volume, which also highlights the importance of the Shanghai factory to Tesla. By the end of November, the Tesla Shanghai factory had delivered a total of 655000 new cars in 2022. Of the specific models, 285900 were delivered by Model Y in the first 11 months, an increase of 121.0% over the same period last year and a decrease of 7.3% over the same period last year.

As for the frequent news of production reduction or suspension of production at Tesla's Shanghai factory, it may be related to the substantial increase in Tesla's current Shanghai factory capacity, market demand not meeting expectations and overcapacity. Starting from the fourth quarter of this year, Tesla listed in China began to launch price reduction promotion, although in a series of measures, November sales have obvious results, but not long-lasting. According to the latest data, Tesla sold only 10254 vehicles in China in the third week of December, down from previous weeks, which also means that Tesla's inventory pressure may increase. For Tesla's sales expectation in the fourth quarter, some media predict that Tesla's fourth-quarter delivery may be as high as 420000 vehicles, and the annual delivery volume may exceed 1.3 million, an increase of about 39% over the same period last year. Of course, this is only a forecast. Whether this is the case in the end will have to wait for official data to know.

In addition to the news of stopping production and reducing production, the recent substantial evaporation of Tesla's market value has also attracted much attention from the market. As of December 27, US Eastern time, Tesla closed at US $109.1, down 11.41%. The latest market capitalization was US $344.51 billion, which lost about 44.4 billion yuan (about 309 billion yuan) overnight. This is the seventh straight decline of Tesla, and the cumulative decline of nearly 70 per cent this year.

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